Six centuries ago, when London and Paris were
irrelevant, plague-infested backwaters, and New York City
wasn’t even on the map, the greatest city in the world was
Nanjing– the capital of the Great Ming.

At the time, Nanjing was not only the most populous city on the
planet, it was also the pinnacle of civilization. Art,
science, technology, and commerce flourished in the Ming
Dynasty’s liberalized economy, which constituted a full 31%
of global GDP at the time.

(By comparison, the US economy is roughly 25% of global GDP
today…)

Taxes were low, the currency was strong, and overseas trade
thrived. For a time, Nanjing truly was the center of the
world.

Over the next several hundred years, the tide shifted. The Ming
Dynasty fell, and power was transferred further west to the
Ottoman Empire, and eventually to Europe which had finally
emerged from the Dark Ages as the most advanced civilization
on Earth.

Pointless crusades and inquisitions gave way to a surge in
medical, technological, and scientific breakthroughs. By the
late 17th century, western civilization had asserted its
primacy in the global pecking order.

This phenomenon has lasted for several hundred years now… but
as history has shown repeatedly, power centers frequently
shift. The world is now witnessing yet another transition of
power, this time from west to east, as the US-led western
hierarchy suffocates within its own debt-laden Keynesian
fiat bubble.

Most westerners refuse to believe it. They can’t envision an era
in which the west doesn’t lead the world… in everything. And
yet, that time is already upon us. Perhaps nowhere is this
more pronounced than in finance:

1) Hong Kong, from whence I write this missive, has been home to
the most public offerings in the world ever since overtaking
New York in 2009. In 2010, more than $57 billion was raised
in Hong Kong IPOs, roughly twice as much as New York.

From Italian luxury house Prada to the luggage maker Samsonite to
Swiss metals house Glencore to the US handbag maker Coach,
big names have been attracted to Hong Kong. Rovio, the creator of the popular Angry
Birds game, is expected to list in Hong Kong as well.

Whereas it was once the obvious choice to list in the US (or
London), Hong Kong has now become the best option for most
businesses seeking public capital.

2) According to the Financial Times’ Banker intelligence unit,
Singapore leads every other major financial center in the
world in financial sector foreign investment.

The top three, in fact, are Singapore, Dubai, and Hong Kong.
Singapore receives more financial sector foreign investment
than New York, London, Frankfurt, and Switzerland combined.

Money goes where it is treated best… and the market is telling us
that Singapore is the right destination.

In the past, countries like Brazil, Ecuador, and Venezuela went
to the World Bank and IMF when they needed money. But
now these vestigial organizations of the old western
hierarchy are becoming a sideshow to Chinese financial
muscle.

The study shows that, since 2005, Chinese banks have loaned more
money and made more loan commitments to Latin America than
the World Bank and International Development Bank combined…
and they’re doing it at higher interest rates.

Why? Because developing nations have figured out that when you
take the World Bank’s money, you have to put up with them
telling you how to run your government. Chinese bank loans
don’t come with political strings attached.

It’s extraordinary that this is happening in the US’s backyard.

4) The most obvious sign of Asia’s rise is the perhaps now
forgone conclusion of China’s currency becoming a new global
reserve option to compete with the dollar and euro.

Every month it seems, there is a new move to loosen China’s
once-strict currency controls and open up– new central bank
currency swaps, renminbi (RMB)-denominated futures contracts
in Chinese exchanges, the introduction of RMB accounts at
non-Chinese banks, non-Chinese companies issuing bonds in
RMB, etc.

In fact, if you want to mark your calendar on the day the West
concedes to Asia, it will be when the US government begins
issuing Treasury securities denominated in renminbi.

None of this means that North America and Europe are falling off
the edge of the earth. What it does mean is that the old
system is being reset, and the rules being rewritten.

It’s not the first time in history that such a shift has
occurred, and it won’t be the last. This change is nothing
to fear… merely something to accept, embrace, and prepare
for.